Street Fight in London: TNT Post UK vs. Royal Mail

Starting in April, the private company TNT Post UK plans to test street delivery in the West End of London. Currently, TNT collects and sorts mail and then hands it over to Royal Mail, the traditional government-run postal provider in the United Kingdom, for final street delivery. Now, however, TNT Post UK wants to provide street delivery as well. TNT is seeking assistance from the UK government to provide a level playing field that will allow it to compete effectively with Royal Mail’s delivery service.
Royal Mail says that rival delivery networks hurt mail customers by undermining the efficiencies of a single delivery network, stating "If a rival delivery service cherry picks profitable, easy-to-deliver mail, it will weaken and ultimately undermine the Universal Service that only Royal Mail currently has the ability and commitment to deliver..." Britain’s postal regulator, Ofcom, plans to monitor the situation. Overall, this move represents another step toward a liberalized postal market in the UK, similar to those in other European Union countries. What are the benefits and risks of promoting this type of competition in the delivery market?
What could happen if a private company sets up a rival street delivery network that only served profitable areas, such as West End of London?
Could the traditional provider, Royal Mail, compete in the more profitable areas if it also is forced to provide delivery services to less profitable addresses in rural areas?

It is certainly a risk that the new entrant will cherry pick. To make it fair, the new entrant should either be required to deliver to all delivery points or should have to pay some sort of fee - and that fee should go to Royal Mail to fund universal service.

I HAVE NOTE ON MY DOOR SAYING 'NO LEAFLETS, NO MENUS, NO JUNK MAIL' BUT YOUR POSTMAN IGNORES THIS REQUEST. THIS REQUEST IS BECAUSE OF SECURITY, IN CASE OF FIRE, TODDLERS SLIPPING ON THE PAPERS AND HURTING THEMSELVES (AS HAS HAPPENED) AND I WOULD BE MOST GRATEFUL IF YOUR POSTMEN PLEASE TAKE NOTICE OF THESE REQUESTS.

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We are having delivery issues with our smaller postal carrier towns. What use to take 1 day to deliver, is now taking two to three days. We have loyal customers who are thinking about dropping their subscription if service does not improve....